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We study the design of optimal monetary policy under uncertainty in a dynamic stochastic general equilibrium models. We use a Markov jump-linear-quadratic (MJLQ) approach to study policy design, approximating the uncertainty by different discrete modes in a Markov chain, and by taking...
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We study the design of optimal monetary policy under uncertainty in a dynamic stochastic general equilibrium models. We use a Markov jump-linear-quadratic (MJLQ) approach to study policy design, approximating the uncertainty by different discrete modes in a Markov chain, and by taking...
Persistent link: https://www.econbiz.de/10012759442
stabilization policy is pronounced. The wealth rich or retired tend to favor inflation targeting. The wealth-poor working class …, instead, favors unemployment-centric policy. One- and two-agent alternatives can show unanimous disapproval of inflation …-centric policy, instead. We highlight how the political support for inflation-centric policy depends on wage setting, the tax system …
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